Extended Withholding Tax Rate change at invoice Level

Hello Every One
We are implementing Extended Witholding TAx in US.
How can i achieve Below
Requirement 1:
At the time of invoice the business want to override the Tax rate, but i am not sure how it will happen since tax rate % is defined in tax codes and tax codes are assigned in the vendor master? The reason for this is that if one vendor has existence in two different countries then our company will with held tax at different rate.
My Solution: I will define one tax code with 100% rate and then if the that vendor has to be deducted at 30% rate. Then in the vendor master in the exemption % field they can put 70%, so at the time of invoice it will be calculated 30%, but the draw back of this is that it has to be maintained by the master data team and the invoice clerk cannot do it right away if the requirement gets changed. (if someone has other than this please let me know)
Requirement 2:
How we can with hold tax at line item level, is it possible?
for example if we receive an invoice from a vendor for 2000$. Out of 2000$ $1200 is belong to service which is taxable and 800$ is belong Material which is not taxable.
Requirement 3.
What will be the configuration setups of with holding tax account in FS03
Best Regards

Refer the sdn thread posted on similar issue
Please search in sdn before posting .
[SDN URL|Set exchange rate indicator in billing;

Similar Messages

Changing Withholding tax base amount- 1099 invoice

Hi Friends,
Need your help again.
Using T. Code FB09, i can change WHT base as long as the invoice is not cleared. However, how to change WHT base where a particular invoice has been cleared?
I have actually made some cchanges to configuration where by i have removed tick for 'line item not cleared'. Ideally with this setting it should allow me to change to WHT base. But the same is not happening.
Can any one help me out with any other steps that are involved.
Thanks in advance,
Regards,
Rajanikanth

Hi Rajanikant,
Please review note 363650 here you will see the following
information;
C) Change Rules for classical and extended withholding tax
      If the withholding tax base amount should be changed after a
      docment has been paid already, the following steps are required:
      For Classical Withholding Tax and only if the withholding tax
     amount is zero.
     Change of withholding tax base amount or withholding tax code of a
     cleared invoice.
     If the withholding tax base amount and/or the withholding tax code
     needs to be changed after an invoice has been cleared please follow
     steps;
As you see from the above information the following quotation "only if
the withholding tax amount is zero".
If a withholding tax amount other than zero has been posted, you cannot
change the values via transaction FB02.
Please also review the IMG documentation for transaction OB32 via
spro -> Financial accounting -> Financial accounting global settings
-> Document -> Line item -> Document change rules, line item.
here you will see the following information;
Document Change Rules, Line Item
In this activity, you determine under which circumstances fields within
posted documents can be changed.
Note
For a number of fields, the system itself determines that they can no
longer be changed after posting. This includes all fields which are
central to the principles of orderly accounting, for example, the amount
posted and the account.
The system also prevents the update objects from being changed in
documents which have already been posted, independent of the document
change rules
Thus as you can see from the above description if an amount has been
posted to the account you cannot change the fields despite entering in
the field in OB32 as changable.
with kind regards
Cora

Extended Withholding Tax - Minimum Amount

Dear SAP Expert,
In our setup we have extended withholding tax incoming payment for outgoing invoices.
The scenario is if invoice base amount is less than 300 EGP (local curreny) then withholding tax information should not capture invoice document.
I setup minimum based amount on withholding tax type and withholding tax codes level but still when user post outgoing invoices WHT information is captured in FI document.
Because of above issue automatic clearing (F.13) is not happening and we are getting error message like "Items with withholding tax code for customer subject to withholding tax"
looking for expert assistance.
B/R
Prashant Rane

Dear Mani,
Thanks for assistance.
from your example I understand if invoice amount is less than 10,000 then WHT should be applicable.
In my example min invoice amount is 300 EGP
where 2 % WHT is applicable
I wanted to know in which below field I should enter 300 EGP (from your example 10,000)?
Calculation > Withholding Tax Codes > Define Formula for calculating Withholding Tax:
Currency u2013 EGP
W/Tax Type u2013 I2
W/Tax Code u2013 P2
Valid from u2013 01.01.2009
To base amount - 999,999,999,999
W/Tax Rate u2013 2%
Reduced Withholding Tax Rate for Exemption u2013 BLANK
Reduction of Base Amount u2013 BLANK
Decreased Reduction of Base Amount - BLANK
Below is complete customizing I did in my setup
Financial Accounting
Financial Accounting Global Settings
Withholding Tax
Extended Withholding Tax
Calculation > Withholding Tax Type > Define Withholding Tax Type for payment posting:
Withhld tax type u2013 I2
Base Amount u2013 Net Amount
Accumulation Type u2013 No accumulation
Control Data u2013 W/Tax base manual, manual W/tax amnt, w/tax for payments, no cert. numbering
Base amount u2013 W/tax code level
W/tax amount - W/tax code level
Minimum check u2013 Min. base amnt check at doc invoice level
Post W/Tax Amount - YES
Calculation > Withholding Tax Codes > Define Withholding Tax Code:
Withhld tax type u2013 I2
W/tax code - P2
Base Amount u2013 Pecentage subject to tax 100%
Postings Indic- 1
Calculation u2013 W/tax rate u2013 2%
Calculation > Withholding Tax Codes > Define Formula for calculating Withholding Tax:
Currency u2013 EGP
W/Tax Type u2013 I2
W/Tax Code u2013 P2
Valid from u2013 01.01.2009
To base amount - 999,999,999,999
W/Tax Rate u2013 2%
Reduced Withholding Tax Rate for Exemption u2013 BLANK
Reduction of Base Amount u2013 BLANK
Decreased Reduction of Base Amount - BLANK
Calculation > Withholding Tax Codes > Minimum and Maximum Amounts
Min / Max Amounts for W/Tax Type
W/Tax Type u2013 I2
Currency u2013 EGP
Valid from u2013 01.01.2009
Min W/Tax Amount u2013 60
Max W/Tax Amount - 999,999,999,999.00
Min base amount u2013 300
Min / Max Amounts for W/Tax Code
W/Tax Type u2013 I2
W/Tax Code u2013 P2
Currency u2013 EGP
Valid from u2013 01.01.2009
Min W/Tax Amount u2013 60
Max W/Tax Amount - 999,999,999,999.00
Min base amount u2013 300
W/tax base exem amount u2013 BLANK
Company Code > Assign WHT Tax Type To Company Code:
Company Code u2013 0011
W/Tax Type u2013 I2
Customer Data u2013 Subject to W/Tax

Extended Withholding Tax & MIRO - total balance

I have the following situation:
Extended withholding tax is active in company code and the withholding tax type is defined for invoice posting. Everything seems to work correctly except for the following detail: if the invoice has additional charges which are only subject to normal tax rate (VAT) or no tax; then during incoming invoice with MIRO the system cannot balance the accounts; always the difference is the w/t amount even though I have typed the base amount in the corresponding tab. For example, if I receive an invoice for services (no GR) with the following items (the W/T rate is 4% and VAT 16%):
Amount subject to W/T and VAT: 4,600
Other charges (no tax): 194
VAT amount: 736
W/T amount (calculated): 184
Net invoice amount: 5,346
If I type 5346 in the amount field and 4600 in the base amount for w/t then the balance is not correct (difference of 184), unless I type 5530 in the amount field (the others values are calculated correctly).
Am I doing something wrong or missing configuration?
Thanks in advance
JAL

Hi,
The amount payable to vendor is 5346 (ie Gross bill of 5530 (less) withholding tax 184). In the header data, let the amount be maintained as 5530. In the withholding tax tab, change the withholding tax base amount to 4600 and the withholding tax amount as 184. This withholding tax amount gets reduced from the vendor bill of 5530.
On simulation, you can see the screen as per your requirement.
Regards
Hari

Classic Withholding Tax and Extended Withholding Tax

Hi,
What is the difference between Classic Withholding Tax and Extended Withholding Tax.
Regards
RKG.

Hi
Withholding tax is calculated and posted to the appropriate withholding tax accounts at different stages, depending on the legal requirements in each country. As a rule, withholding tax is posted at the same time that the payment is posted, in other words the outgoing payment (Accounts Payable) or incoming payment (Accounts Receivable), is reduced by the withholding tax amount.
In certain countries, such as Brazil, the Philippines, and Spain, withholding tax can or must be posted when the invoice is posted. This means that the amount receivable or payable is reduced by the withholding tax amount.
Extended withholding tax supports both concepts.
The key concept in extended withholding tax is the distinction between withholding tax type and withholding tax code. While withholding tax types represent basic calculation rules, specific features of these rules - in particular the percentage rate -
are represented by the withholding tax code. You can define any number of withholding tax codes for a given withholding tax type.
If a particular transaction requires more than one kind of withholding tax, this is covered in the SAP System by defining more than one withholding tax type.
When entering a line item, you can enter withholding tax data for each of these withholding tax types.
How To Configure Withholding Tax?
Steps for extended withholding tax :
1. Check withholding tax countries
2. Define Ex. Withholding tax types for invoice postings
3. Define Ex. Withholding tax codes
4. Formula for Ex. Withholding tax calculation
5. Assign Ex. Withholding tax types to Company code
6. Activate Ex. Withholding tax
8. Create a G/L a/C for Ex. Withholding tax
9. Define A/C for Ex. Withholding tax (DBWW)
10. Make changes in Vendor master (XK02)
11. Maintain Company Code Settings:
Path: IMG -> Logistic -> General -> Taxes on goods movement -> India -> Maintain company code settings
12. Activate country version for specific fiscal year position
Path: IMG -> FA -> -> **** -> Taxes on sales purchases -> Basic Setting -> India -> Activate country specific for fiscal year position
http://help.sap.com/saphelp_erp2005/helpdata/en/e5/0780914acd11d182b90000e829fbfe/content.htm
nagesh

Extended withholding tax - US Error 7Q 301 updating withholding tax

Cannot get the system to allow me to change the withholding tax information on the accounting documents. Extended withholding tax has been configured. The fields in the line items have been opened to allow changes to the withholding tax data, both for K and S. The venodor has been updated for the withholding tax type and code. Program RFWT0010 does not update any records. The funny thing is it works in the sandbox but not the regular testing dev client. I have compared config and it is the same in both places. Any ideas?
Thank you.

Hi,
Please refer to note 363650, you will see the following information;
C) Change Rules for classical and extended withholding tax If the withholding tax base amount should be changed after a
docment has been paid already, the following steps are required:
For Classical Withholding Tax and only if the withholding tax amount is zero.
Change of withholding tax base amount or withholding tax code of a cleared invoice.
If the withholding tax base amount and/or the withholding tax code needs to be changed after an invoice has been cleared please follow steps;
As you see from the above information the following quotation "only if the withholding tax amount is zero". Is this the case in your scenario?
If a withholding tax amount other than zero has been posted, you cannot change the values via transaction FB02.
Please also review the IMG documentation for transaction OB32 via spro -> Financial accounting -> Financial accounting global settings -> Document -> Line item -> Document change rules, line item. here you will see the following information;
Document Change Rules, Line Item
In this activity, you determine under which circumstances fields within posted documents can be changed.
Note
For a number of fields, the system itself determines that they can no longer be changed after posting. This includes all fields which are central to the principles of orderly accounting, for example, the amount posted and the account.
The system also prevents the update objects from being changed in documents which have already been posted, independent of the document change rules
Thus as you can see from the above description if an amount has been posted to the account you cannot change the fields despite entering in the field in OB32 as changable.
Please also be aware that the important table concerning extended withholding tax is WITH_ITEM. This is where the data found through the button 'Withholding tax Information' in FB03 is held.
(For example in the 'Withholding tax data button' If you click on the help of the field Withholding Code and select the button 'Technical information' you will see that the field name is WT_WITHCD) The fields concerned with same
WITH_ITEM-WT_QSSHB
WITH_ITEM-WT_WITHCD
should be customized in the document change rules (transaction OB32) You will also have to ensure that the posting keys in the document are set to optional (transaction ob41)
Regards
Ravinagh Boni

Different fiscal year for extended withholding tax

Hi All SAP Gurus,
I have configured the extended withholding tax as per the Indian requirement.But I am unable to meet the following to requirement as per client's need.Can anybody help me out please?
1) My client is following Calander year ( Jan to Dec.) for Global ledger and it is assinged to Company code Global setting.For Local reporting in India, we are using Non-leading ledger L1 and fiscal year V3 ( April to march) is assignd to it.Now the problem comes when we perform the TDS process.
a) We assigned the number range etc. for Internal challan number and TDS certificate.When we run J1INCHLN and J1INCERT, system is picking the number as per the calalnder year and not as per the April to march fiscal yearThis creates problem for the priod of next year (say jan to march 2010).Can anybody worked on such a senario. Please help me out.
b) Second requirement is client wants lower rate deduction of TDS. I really don,t know much but I wonder that how we can set lower rate deducation in SAP as it is linked to the total Invoice amount and from and to period. I could not find anything in the vendor master where we can assign period as well as total turnover amount for lower dedcution.
Please helpme out.
Thnaks in advance.

Hi, Ekta
For lower deduction of Tax you will have to do the following Config:
1.In SPRO Extended WTD --> Basic Settings --> Define Reasons for Exemption:
Reason for exemption
Indicator used to classify different types of exemption from liability
to a particular withholding tax.
Enter Text field such as Concessional Rate of Vendor Name
2.Extended WTD --> Calculation --> India --> Settings for Annual Returns --> Assign Exemption Reasons to Withholding Tax Codes:
Mantain Country, WTH Tax Type, WTH Tax, Exemption reason creatd above.
3. In the vendor Master enter the following details:
Exemtion Number - Certificate no. recd.from Income Tax dept.specifying reduced rate of TDS
Exemption % : 25
Exemption Reason: One created by you.
Exemption From Date:
Exe,ption To Date:
This should resolve part of your issue.
Thank You.

How to Have Two Withholding Tax Code in One invoice

Hello,
We are using Extended Withholding Tax, and we have defined 9 Withholding Tax type specials, this because is the same withholding type, but we different %, also we have defined more than one Withholding Tax Code, for each one. This kind of Withholding Tax in Venezuela it is called ISAE, and for one invoice I could have more than one ISAE Withholding Tax, in this with have configurated diferents withholdings tax types, but it is a issue because, the system generate one Certificate Numbering for Withholding Tax, but for us this needs to be the same,and only generates one Certificate Number and make the sum of the two amounts. Because is the same Withholding Tax, we need to report only one.
E.g. I post an invoice 1000999, with two Withholding Tax type, 23 -with tax code 01 and 24 with tax code 02, when i Generate the report I get:
Vendor Certificate Number Wh. t.t. Wtx Amount in RC wt amount
10000 00000000001 23 01 90000 2000
10000 00000000002 24 02 90000 1500
We need:
Vendor Certificate Number Wh. t.t. Wtx Amount in RC wt amount
10000 00000000001 23 01 90000 3500
We tried to defined only one Withholding Tax type with all the Withholding Tax Code, but the system doesn't allow to post in the vendor master data, more that one Withholding Tax type, we tried to leave it blank, but when we do the FB60, we can´t select multiple Tax Code.
How we can post a document with more tham one tax code? or what we have to do to solve the problem?
I appreciate all the help you can provide me.

Hello Mauri
Thanks for your answer, but in this moment we have the configuration exactly like you suggest, but in the moment of we generate the certification number we get two or more numbers, and we only need that the systme generates only one. It is correct that the sistem generates two or more because in one invoice we need and we use two or more wt type ISAE, but for Legal Reasons we need that the system generates only one certificated number, because is the same wt type. You know if we can do any validation? or we must do anything else to get only one certificated number? we never know or is not a rule to use a specific combination of Wt Type.
tks Fati

Migration from Withholding Tax ( Classic ) to Extended Withholding Tax

Dear All,
I am doing the Migration from Withholding Tax ( Classic ) to Extended Withholding Tax, I am getting the following error.
I made all the customization and done the necessary process flow steps.
Now I am doing the last transaction i.e. Migration Programme ( J1INMIG )
I am getting the following error. i.e.
Health Check not carried out or health check has reported errors....
Message no. 8I775
Diagnosis
Before migration of data is carried out, it is advisable to carry out the integrity of customizing in both SAP ECC and CIN.
It appears that either the health check is not carried out, in which case it can be run using transaction j1inhc, or the health check has reported errors.
Procedure
Run health check program if not already run.
Resolve the errors reported in customizing and re run the health check.
In case you do not wish to use health check tool, manually update the field 'STATUS'as 'X' for the company code.
So I checked in Health Check ( J1INHC ). Here All are showing the Green Status.
EXCEPT THE FOLLOWING IS IN YELLOW STATUS .
34            Invoice with Payment Type tax code created in classic cannot be executed after switching to EWT.
               These documents have to be processed before switching to EWT.
               SERIAL NO.     COMPANY   DOCUMENT NO.   POSTING DATE   FISCAL YEAR
               1              ITS       1900000022     09.12.2009     2009
               2              ITS       1900000027     09.12.2009     2009
               3              ITS       1900000023     09.12.2009     2009
               4              ITS       1900000021     09.12.2009     2009
               5              ITS       1900000020     09.12.2009     2009
               6              ITS       1900000019     09.12.2009     2009
               7              ITS       1900000018     09.12.2009     2009
               8              ITS       1900000016     09.12.2009     2009
               9              ITS       1900000024     09.12.2009     2009
               10             ITS       1900000025     09.12.2009     2009
               11             ITS       1900000015     08.12.2009     2009
I noticed that because the above documents are having the openitems and down payments. And If I clear the these documents it is becoming Green Status.
It means now my Health Check is correct, Because all are showing the Green status.
Now If I run the Migration Programme ( ( J1INMIG )
IT IS NOT EXECUTING. IT IS GIVING THE MESSAGE THAT NO DOCUMENTS FOUND.
Kindly advise I don't understand the above Migration programme execution and the error details.
Regards
Kumar

Hi All,
Nobody has not answered my issue.
Otherwise anybody can explain in detail about " MIGRATION PROGRAMME " ( J1INMIG ).
I want details about this last T.Code only i.e. J1INMIG and remaining all the necessary steps I completed.
An early reply will be highly appriciated.
Regards,
K. S. Sai Kumar

Extended Withholding tax issue

Hi Everyone,
I am facing a problem with my extended withholding tax.. I have done all the configuration and an entry gets created in table WITH_ITEM but this entry is for $0
I go to MIRO Transaction to create my invoice but the base amount is always blank, after that or at same time I can manually enter the base, or the amount but system is not calculating mnually someone could help me or have any idea on this?
Thank you and regards

Hi
Check your with holding tax type configuration what is the basis for calculation of base amount under the below path:
IMG ‡ Financial Accounting ‡ Financial Accounting Global Settings‡ Withholding Tax‡ Extended Withholding Tax ‡ Calculation‡ Withholding Tax Type ‡ Define Withholding Tax Type for Invoice Posting
Depending on this set up, system determines the base amount on which the with holding tax must be calculated. Under the control tab, you may want to remove the manual with holding tax base amount and make sure that one of the radio buttons in Calculation> Base Amount is maintained depending on how you want to calculate the with holding tax
regards
Sanil Bhandari

Extended Withholding tax changeover

Hi, I want to activate extended withholding tax for a company that has not used classic withholding tax. The changeover process only deals with moving from classic to extended. How do i move from nothing to extended ??
transaction WTMG - Company code selection - the system delets company codes for which classic withholding tax has not been used......... so how do I convert the existing data

Hi Dipak,
All invoices posted prior to activating EWT do not get paid - details when displaying the line item within F110 say at the bottom in the Note section "Item cannot be paid due to inconsistent withholding tax information". I tried entering an exemption number on the master record with a date range up to the date of activation, but that makes no difference to the error in F110. If I go into the open items and update them for withholding tax, the items then get paid via F110.
This leads me to believe that all old open items need to be converted.
Regards,
James

Extended withholding Tax in ECC6

Hi All
We have activated extended withholding tax in IDES ECC6.Have completed all the stuff from IMG, while assigning Tax code to Vendot Master, we are not finding the 'WHTType' and 'Liable' field
ready to input. These two fields are disable. Further when we assigned Tax code 'C1' from the dropdown in Tax code field , which is ready to input , it is showing the below error that *'IN C1 are not specified in Table T059Z, though it is there in the said table.
It will be highly appreciable if any one can say the reason or if Notes needs to be applied to activate these fields.
Error Message'
Entry IN C1 does not exist in T059Z (check entry)
Message no. 00058
Diagnosis
Input values must be defined in Table T059Z. The value or values 'IN C1' are not specified in this table.
Procedure
Check whether the input is correct and correct if necessary.
Procedure for System Administration
If this is not an incorrect entry, check the system settings and change them if necessary.
If there is a connection to the Customizing system, you can maintain the system settings by choosing Customizing in the Performance Assistant or Maintain Entries (F5) when displaying the help in a modal dialog box.
Regards
Mukta

Hi ANJIREDDYA
Thanks for response.We maintained this link under Extended Withholding tax-- Calculation-withholding tax code, where we need to define tax type and tax code against country IN. This is coming under table T059Z as well , when we see through SE16.
But still we are not able to assign tax code in Vendor master due to the below error.
Regards
Mukta

Suitable BAPI for extended withholding tax

we are migrating from classic withholding tax to extended withholding tax for which we are modifying all the programs which were using MRHR (invoice) in the background, since MRHR will be replaced by MIRO in extended withholding tax, in this process when we are trying to modify one program, we could not record MIRO, hence our technical team suggested for use of BAPI functional module, kindly anybody suggest me which is the suitable BAPI for posting of invocie verification.
Thanx in advance.
Krishna

Hi Krishna,
Please check BAPI_INCOMINGINVOICE_CREATE and let me know.
Assign points if it useful.
Regards
Ravinagh Boni

Issue with Cross-Company code transactions and Extended Withholding tax

Hi Gurus,
I am having an issue with Cross-company code transaction while posting expense with 2 different company codes.
In the 2 company codes, one company code is setup for Withholding tax and other was not set.
While posting in FB50, I am getting the below message and system does not allow to post the invoice.
Company codes have different settings for withholding tax treatment
Message no. F5786
Diagnosis
You are entering a document containing at least one vendor or customer item and which has line items in several company codes. The extended withholding tax treatment has been set to active in one of these company codes, but not in one of the other company codes.
System Response
You cannot enter this kind of document.
Procedure
Enter the transaction in two documents.
For this I tried to test the transaction by activating of extended Withholding tax for both the company codes. Then the invoice is posting correctly now.
The point is if I activate extended withholding tax for the Company code which is not using the setup, will it face any issues in other areas? and also kindly advice whether is this a right way to set up to fix the current problem.
Thanks for the Support and early response will be appreciated.
JBC.

Hi Mamta,
Thanks for the Response. I think you misunderstood my scenario.
For Eg in FB60 with Co code 5065:
I am debiting the Expenses for Co Code 1000(Witholding tax not active) and crediting the Bank Account of Co Code 5065(Withholding tax setup is done for this co code). When I tried to post with these line items I have getting the error.
Posting        GL                   Co Code
Dr          106520(Exp)            1000
Cr          202020(Bank)           5065
For this I tried by activating the Withholding tax for Co code 1000 which is not active before and post it. The system allows me to post the invoice.
I want to know whether is this a right way to solve this issue and will it impact on any other areas by only activating the Withholding tax for a Co code?
Thanks,
Bapu

Standard vs extended withholding tax

Hi All,
I would like to seek advice on WHT.
1) may i know what is the difference between standard and extended? why there are kind of WHT?
2) standard and extended version is only in sap system or it is globally known in financial and accounting world.
Thank you.

Hi,
These are basic differences
Withholding Tax
Classic Withholding Tax (All release)
Extended Withholding Tax (from release 4)
Difference between the two
S.No       Individual Function                                                    Classic         --                  Extended
1        Withholding Tax on Outgoing payment                              Yes             --                     Yes
2        TDS on Incoming payment                                                 x                 --                        Yes
3        TDS at the time of Invoice                                                  x                  --                      Yes
4        TDS on partial payment                                                     x                  --                        Yes
5        No. of withholding tax from each document                     Max 1            --                  Several
6        TDS basis
          - Net amount                                                                    Yes             --                      Yes
          -Gross amount                                                                 Yes             --                      Yes
          -Tax amount x                                                                  x                 --                        Yes
7        Rounding rule                                                                    x             --                         Yes
8        Cash discount consideration                                            x              --                         Yes
9        Accumulation                                                                    x               --                        Yes
10      Minimum/Maximum amt and exemption                              x               --                       Yes
11      Certification Numbering                                                     x                --                       Yes
12      Calculation Formula                                                          Yes            --                      Yes
regards,
Santosh kumar
Edited by: santosh kumar on Sep 21, 2009 6:29 AM

Extended Withholding Tax Rate change at invoice Level

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